BARGAIN LEASING PRICES PUSH DOWN COUNTY’S RETAIL VACANCY RATES

Available space has fallen by 300,000 square feet since January

Large spaces

Most of the activity in the market is being driven by struggling stores like Sears and Borders, which went bankrupt, vacating large spaces that have been snapped up by other retailers. There wasn’t much new retail construction this year, but examples included a 99 Cents Only store at Market and 26th streets, and a new Vons in Mission Hills.

A few high-profile sites mentioned in the report:

• Sears Essentials moved out of 94,500 square feet in its Clairemont Mesa store. Zion Market, a Korean supermarket, has signed a lease to take over the space.

• Albertsons moved out of 22,200 square feet at Coronado Square in the Nestor community of south San Diego. It was known as the Imperial Beach store because that’s where many city residents shopped. There’s no word yet on what will happen with that space.

• Walmart took over 105,900 square feet on Leucadia Boulevard in Encinitas, replacing a Home Expo that closed.

• Buybuy Baby took over 27,500 square feet on North El Camino Real in Encinitas, replacing a Linens ’n Things that closed.

Malls rule

San Diego’s malls are sought-after by national retailers because there are relatively few of them serving a robust market.

Vacancy rates in malls were just 2.6 percent at the end of the second quarter, although rental prices dropped slightly from the first quarter to about $23 per square foot per year. Power centers — mostly anchored by big-box stores, such as Walmart — also did well, with a 2.6 percent vacancy rate and rental rates rising slightly from the first quarter to about $28 per square foot per year.